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Sportsbetting.com defeats patent challenge

Posted 3/22/11 : In what may be the first patent case tried to verdict in the United States by the online gambling industry, Interactive Systems, Inc. NV.,, the licensed operator of Sportsbetting.com, soundly defeated the patent infringement claim of Lottotron, Inc., based in New Jersey.

Last week, an eight person jury returned a unanimous verdict in favour of ISI in the case before Judge Faith S. Hochberg in the United States District Court for the District of New Jersey, Case No. 09-4942.

ISI was represented by Bill Gantz of the Chicago office of SNR Denton US LLP, who said: “Over the years we have all seen the ‘licenses’ exacted by Lottotron, 1st Tech, Home Gambling Network and other tenuous patent owners, so I have to say it feels really great to put one of these patents down for the industry."

Lottotron, the owner of United States Patent Number 5,921,865 (the “‘865 patent”) entitled “Computerised Lottery Wagering System,” claims a method by which an individual enrolls remotely with the system by setting up an account, establishes a credit balance, selects a lottery or lottery-like game to play, and finally, places a lottery wager for the selected game using the balance.

The stated purpose of the system is to permit an individual to place a wager remotely without having to physically go to a lottery agent to place a wager. However, in a series of lawsuits targeting the online gaming industry, Lottotron has been asserting that its lottery ticket ordering patent covered any remote gaming system offering games of chance.

All other operators served with the same lawsuit settled or allowed a default. ISI, however, opened the fight with a motion for summary judgment, and won a ruling from the court that ISI’s online casino games did not literally infringe the patent as a matter of law.

“This ruling helps all operators going forward,” said Gantz. “The ruling also forced Lottotron to proceed on the theory that there was infringement under the “doctrine of equivalents.”

“This meant that Lottotron had to prove that the casino games offered, including scratch cards slots and video poker, were insubstantially different from the types of games typically sold by state lotteries,” says Gantz.

In that case, Gantz intends to replicate the novel strategies used successfully in the ISI case, which kept the defence costs down.

“If the defendants in the new case band together, we can follow the same strategy used for ISI and eliminate this patent as well as others, instead of operators taking the proverbial ‘licence,’ Gantz asserted.

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